Headwinds for SMEs

THIS YEAR is expected to be an uncertain one for small and medium-size enterprises, say some entrepreneurs.

Malaysian Indian Restaurant Owners’ Association president Muthusamy Thirumeni said with major floods and depreciation of the ringgit, it was expected be a challenging year.

“We are looking at reducing our operational costs for things such as the number of workers we hire, and strengthening our local markets,” he told Metrobiz after the National Chamber of Commerce and Industry of Malaysia (NCCIM) roundtable on “Promoting and Empowering Malaysian Entrepreneurs” last week.

The roundtable in Kuala Lumpur, which was attended by the NCCIM’s members and Minister in the Prime Minister’s Department Datuk Dr Wee Ka Siong, was held to gather feedback on the revised Budget 2015, announced by Prime Minister Datuk Seri Najib Tun Razak on Jan 20.

Muthusamy, whose association represents over 1,200 members who mainly operate banana leaf rice restaurants, said government policies had been quite supportive of the industry, despite the introduction of the ruling for the mandatory renewal of work permits for foreign workers via the MyEG portal.

“It was abrupt and many of us are not computer literate. If some of our members have problems renewing the permits, it could lead to properly registered foreign workers becoming illegal in a short period of time,” he said.

Sydney Cake House Sdn Bhd managing director Jenny Chuang expected more paperwork with the impending implementation of the goods and services tax (GST) and rising cost for a short period of time.

“But I believe in the next six months or so, business will be back to usual,” she said.

As a food and pastry manufacturing company, she foresees sales of her company’s products in cafes being affected, while sales to hypermarkets and catering services should remain robust.

“We are also investing in automation to reduce the number of workers and also increasing productivity,” she said.

For Abdul Rahman Yaakub, director of RN Land Ventures, a company that prints advertising material like bunting and signs, the reduction of government expenditure has been affecting the company since last year.

He said more SMEs would be affected due to the announced RM5.5bil cut in government spending, which includes deferring the National Service programme to maintain economic growth at between 4.5% and 5.5% this year amid plummeting oil prices.

“With the (deferment) of National Service programme, we see laundry, catering and event management companies being affected,” hesays.

On another note, NCCIM secretary general Datuk Seri Syed Hussien Al Habshee said it is vital to ensure that grants or financial assistance given by the government to SMEs are properly monitored. There needs to be follow-up and to appoint management consultants able to advise and audit them from the accounting, legal and other business perspectives,” he said.

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